Bank of England Maintains Interest Rates at Record Low

The interest rates have been at the record level for five years, but, there was some expectation that the rates could start to rise after Bank Governor Mark Carney hinted at such in June.

Recent figures have suggested growth in many UK sectors, with the service sector having a continued and robust recovery. However, there are concerns that the rate of growth in manufacturing has slowed, with data showing a small increase of 0.3% in June, smaller than expected, after it fell by 1.3% May.

The decision was taken by the Bank of England’s Monetary Policy Committee (MPC). The minutes of the meeting outlining their decision will not be presented publically until August 20.

The minutes of the July meeting of the MPC showed that all nine members voted to maintain the status quo. There was concern regards the economic situation overseas and the level of exports accordingly, with the committee also saying:

“(while) employment had continued to increase robustly… wage growth had been surprisingly weak”.

If the minutes of the latest meeting reveal that some members voted for a rise, it will be the first split decision in over three years.

Though Mr Carney had hinted at a rise, most economists had been forecasting that an interest rate increase would not be seen before the first quarter of next year.

The Bank also revealed that its quantitative easing programme would also remain unchanged at £375bn.